Boutique Firms Expand Investment Banking Firms’ Business.

Investment banking firms are focusing on mergers and acquisitions to expand their product offerings and increase their market share. Large investment banking firms are acquiring boutique firms (small firms which are specialized in various fields) which cater to specific industries such as technology, health care, financial sector, media and entertainment. The presence of a large number of small firms focusing on niche markets provides significant opportunities for larger firms to acquire them over the next five years. As a result, high levels of activity can be expected in mergers and acquisitions within investment banking firms in the near future.
INVESTMENT MARKET TO REACH $2.3 TRILLION BY 2020 ACCORDING TO THE BUSINESS RESEARCH COMPANY.
The Business Research Company expects the investment market to grow to $2.3 trillion in 2020. The Americas was the largest geographic market in the investment industry in 2016, accounting for more than a half of the global market. This can be attributed to high presence of assets under management in countries such as the US and Canada.

According to The Business Research Company’s Financial Consultant, Girish Kavali, another noticeable trend in the market is Cross-Selling and Upselling among bank brokers. Cross-selling and upselling of products and services is becoming popular among bank brokers. Cross-selling and upselling is required to capture a larger portion of the client’s assets. In addition, bank brokers across the world are focusing on aggregating information related to client account and lowering their fees to serve affluent investors. This allows bank brokers to cross-sell their online trading and advisory-based services to affluent investors, who hold multiple accounts with retail banks and bank brokers

Morgan Stanley is the largest competitor in the investment industry with a revenue of $20.33 billion from the investment segment in the financial year 2015. The company’s growth strategy is to make investments in companies that are listed in the Russell 1000 Growth Index. It is focusing on long-term rather than short term events and is preferring companies with free cash flow yields and favorable returns on invested capital trends to invest in.
The investment market comprises all establishments engaged in managing various investment related activities such as securities underwriting, stock brokerage and wealth management service. The investment industry is categorized on the basis of the business model of the firms present in the industry. Some firms might come under multiple categories.
The figure below shows the year-on-year growth of the global investment market during 2016 – 2020.

The investment industry is broadly classified into the following:
Investment Banking comprises establishments primarily engaged in undergoing capital risk in the process of underwriting securities. This market excludes companies acting as agents and/or brokers between buyers and sellers of securities and commodities. These establishments primarily involve in underwriting, originating, and/or maintaining markets for issue of securities. It includes activities such as mergers and acquisitions advisory, debt capital markets underwriting, equity capital markets underwriting and syndicated loans/financial sponsor.
Securities Brokerages & Stock Exchanges comprise establishments primarily engaged (brokers) in selling securities such as equities, bonds, commodities and derivatives. They represent customers in dealing with securities transactions on the trading floor/online platform. The securities brokerages might sometimes act as a representative for both buyer and seller. This segment excludes the advisory and investment activities of the brokerage firms.
The securities brokerage and exchanges market is categorized based on business transactions. These entities usually charge a fee or a certain proportion of the trade value as a commission for their services. Such commission is usually deducted or collected from both the buyer and seller of the securities. Commissions are generally fixed by respective brokerages but are subject to country specific regulation and statutory laws.
Wealth Management comprises establishments engaged in planning, advising and managing various kinds of assets. This segment covers financial and investment advice, retirement planning and legal or estate planning but excludes accounting and tax services. Market is the revenue generated from the fees and commissions levied on the assets being managed. This market includes brokerage and custodian charges of the firms.Investment Global Market Briefing is a detailed report giving a unique insight into this market. The report is priced at $750 for an individual user. To use across your office the price is $1500 and $2000 if you wish to use across a multinational company.
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